BHP Billiton has finally approved the development of the Caval Ridge coal mine and the expansion of the Peak Downs coal mine.
The announcement comes after the miner faced serious opposition to the move, in particular to its plan to make the workforce at Caval Ridge 100% fly in fly out.
The miner planned to initially source 80% of the workforce from the local area, however it soon changed this to a fully FIFO workforce.
Despite this local opposition, the announcement has been welcomed by the Queensland Resources Council (QRC), which congratulated the miner on its decision.
Head of the QRC Michael Roche said "the decision confirms that coal is set to lead the Queensland resources sector field for some time, but with the gas sector coming hard on its heels
"However, all the indications are that Queensland’s traditional strengths in coking coal exports for steelmaking, together with some mega mine proposals for thermal coal under study in the Surat and Galilee Basins, will see coal remain the backbone of jobs, investment and royalty generation for the Queensland resources sector,’ he said.
The initial project will add around eight million tonnes annually in coking coal, and will soon grow production to ten million tonnes per year.
However this expansion has not yet been approved.
Investment for the joint venture project totals around US $4.2 billion, of which BHP will provide around US $2.1 billion.
BHP Billiton metallurgical coal president Hubie van Dalsen stated that "this investment in the Caval Ridge Mine was foreshadowed in March of this year when BHP Billiton announced investments in the new 4.5 million tonne per year Daunia mine, the life extension of the Broadmeadow mine and the 11 million tonne per year expansion of the Hay Point Coal Terminal.
"This is a continuation of BHP Billiton’s strategy of investing in large, low cost, expandable mines with long lives. Additional expansion projects are being advanced to follow this investment in due course," he added.
Caval Ridge will have predicted mine life of more than 60 years and will produce 5.5 million tonnes annually.
The investment will include the construction of a new coal handling and preparation plant at Caval Ridge to process production from both mines.
Coal from the Peak Downs expansion will be transported by conveyor to the new plant. The Peak Downs Mine lies to the immediate south of Caval Ridge.
BHP will run the mine through its joint venture BHP Mitsubishi Alliance (BMA).